Should I rotary file the slight raised edges at the dash cracks, and perhaps fill the cracks with something prior to installing and glueing the new cover on? Anyone have good results doing this or am I going to just make a worse mess.

This possibly will be a Christmas holiday project (gift).
for my 87 300E, blue dash.

I have not done this but a friend of mine did with quite good results. His dash was really cracked. He did sand it smooth. He didn't used double-sided tape. I these sites have some helpful information regarding the installation and prep. Try this: http://www.coverlaymfg.com/instructions.html

I believe the first is one in the list below is one of the original companies making dash overlays.

And the trick is to follow the instructions and not your instincts. The mfgs. will tell you to NOT overdo it with the adhesive as this lets the cover 'move' as the temperature changes. It must remain flexible without any restraints as this is what causes the cover to crack and split.